У рамках семінару президент Академії Єфименко Т. І. виступила із доповіддю на тему «Anti-crisis Fiscal Adjustment in Ukraine» щодо проблем і напрямів реформування фіскальної політики в умовах воєнного стану та післявоєнного відновлення в Україні.
Зокрема, розкрито вплив неконтрольованих дисбалансів у фіскальному просторі на фінансову безпеку країни в контексті нової економічної реальності та ризиків поширення кризових явищ в умовах невизначеності і геополітичної конфліктогенності, а також наголошено, що отримання Україною статусу кандидата в члени ЄС потребує подальшої гармонізації податкового законодавства України із законодавством ЄС.
Програма Семінару з права та політики (Workshop on Law and Politics),
м. Будапешт, 30.06 – 01.07.2022 р.
10:00–10:10 Opening remarks
10:10–10:25 Gábor Hulkó (Széchenyi István University): Regulatory and Applicational Issues of Local Taxes in Hungary
10:25–10:40 Tetiana Iefymenko (National Academy of Sciences of Ukraine): Anti-crisis Fiscal Adjustment in Ukraine
10:40–10:55 Edvardas Juchnevicius (University of Gdansk): Anti-avoidance Rules after the Pandemic in Lithuania
10:55–11:10 Mariusz Popławski (University of Bialystok): Income and excise tax reform in Poland. How the law cannot be modified
11:10–11:25 Michal Radvan (Masaryk University) : Are changes in Czech tax law necessary or is it just a political issue?
11:25–11:40 Miroslav Štrkolec (Pavol Jozef Šafárik University in Košice): Tax Law in Slovakia under the Influence of the Effects of the Pandemic and Digital Transformation
11:40–12:10 Discussion
12:10–13:00 Lunch break
13:00–13:30 Orkun Yılmaz (Istanbul Technical University): Is ‘Democracy’ an Essentially Contested Concept?
13:30–14:00 Dorina Mihaela Pătrunsu (University of Bucharest): Is compulsory voting enhancing participatory democracy? Two arguments against it
14:00–14:30 Regina Queiroz (New University of Lisbon): Refraining the transformation of democracies into demarchies
14:30–15:00 István Kevevári (University of Public Service): A Democracy Worthy of its Name – Jacques Derrida’s Concept of ’Democracy-to-Come’
15:00–15:30 Xuanpu Zhuang (Bowling Green State University): Blogging Together in China: The Power and Limits of Social Media in Monitoring.
Доповідь президента Академії фінансового управління Т. І. Єфименко
«Anti-crisis Fiscal Adjustment in Ukraine»
Ladies and Gentlemen,
I am really glad to have such a wonderful opportunity to greet the participants of this respectable Conference today. I would like to express my sincere gratitude to the University of Public Service as well as the Hungarian academic community as a whole for giving me the honor to speak on behalf of the Academy of Financial Management. We have an ongoing privilege to cooperate with our good friends, European universities. I believe such cooperation will facilitate strengthening of friendship between the people of our countries, which, in its turn will help to find the best solutions within the framework of supranational European economic environment. I appreciate the efforts of panel organizers especially Mariusz Popławski, to create the atmosphere that inspires and encourages us to share best practices in government finance management.
Taking advantage of this opportunity, I would like to offer essential insights into Ukraine’s reform agenda.
In the world practice uncontrolled imbalances in the fiscal space are a real threat to the country's financial security in the context of the new economic reality and the risks of the spread of crisis phenomena under the conditions of uncertainty and modern geopolitical conflictogenity.
Sustainability of public finance is impeded by soaring interest rates, guaranteed protection of vulnerable social strata from the aftermath of high food and energy prices or by rising defense spendings. At the same time, vulnerability to the shocks of prices on commodities, which add to the inflation and economic instability, is enhanced by delays in measures to counteract the climate crisis. So, I would like to emphasize that interaction of these risks and measures is rather complex in short-, medium and long-term perspective.
I will express the well-established opinion of many authoritative experts and witnesses of the real situation - catastrophic losses for Ukraine's economy during the war cannot be compared with the consequences for any other country: a serious economic decline in our country is a direct result of invasion, infrastructure destruction and mass migration.
The graphs that you see on the screen are the evidence. It is obvious that there will be a sharp double-digit decline in Ukraine's GDP, as well as rising inflation. Global economic growth is projected to slow from about 6.0 percent in 2021 to 3.5 percent in 2022-2023.
Then, the world economy growth is projected to decline to about 3.3 percent in the medium term. HDI dynamics is also offered to your attention. Since 2020 and in the future, such data have not yet been made public.
But we are confident that its index will grow both in Ukraine and around the world after this terrible war.
Therefore, it is clear that in the near future the role of the regulatory function of taxes will grow. But this trend will only be acceptable if the fiscal function of taxes is balanced with the interests of the world community, united around the goals of innovative plans for postwar reconstruction
In recent years, under the influence of internal and external factors, the impact of risks on the development of public finances in most countries has increased. The security of the country largely depends on the organizational possibilities of prevention: large-scale outflow of capital abroad; its "erosion" from the real sector of the economy etc.
The political task recently voiced by President Volodymyr Zelensky - to take more decisive action to comply with the principle of tax justice. We expect that in our country such actions will be accompanied by the unity of the society around the goals of building a sustainable and resilient national socio-economic system.
Undoubtedly, public authorities within the organization of compliance risk will make more informed decisions when adopting and implementing further fiscal innovations.
As it is well known, such functions are usually entrusted to independent fiscal bodies created, for example, to the state Parliament, or to authoritative public organizations.
In accordance with the guidelines of the European Union on stability, predictability and effective tax administration, given in the Association Agreement between Ukraine and the European Union, cooperation in the field of taxation is planned regarding the organization of fiscal management on the principles of transparency, mutual exchange of information, fair tax competition.
Measures of anti-crisis tax policy in the conditions of martial law and post-war recovery and anti-crisis COVID-19 pandemic tax policy often contradict the needs of harmonization of tax legislation of Ukraine with the norms of the European Union. However, these needs have become extremely relevant at the present stage in connection with Ukraine's gaining the status of a candidate for membership in the European Union.
Since the beginning of the war, a number of laws of Ukraine have been adopted, which have made radical changes in the domestic tax system for the period of martial law. However, in view of the above, further clear, adequate state actions are needed to apply anti-crisis tax policy tools.
Regarding direct taxes, in my report, I would like to offer highly esteemed audience the overview of reforms in Ukraine in terms of preventing large-scale operations aimed at reducing or avoiding corporate income tax liabilities. Since 2018, Ukraine has joined the OECD's Expanded Cooperation Program. The mandatory implementation by Ukraine as the minimum standard of the BEPS Action Plan are 4 steps.
In February 2019, the Ukrainian Parliament ratified the Multilateral Convention on the Implementation of Measures Relating to Tax Agreements in order to counteract base erosion and profit shifting. Thus, Ukraine is given the opportunity to amend all or some of the current Double Taxation Conventions, and simultaneously takes steps 6 and 14 of the BEPS Action Plan. Implementation of the above-mentioned commitments in the financial management practice should be accompanied by the development and use of standardized methods for identifying duplicate information as well as estimates of substantially similar indicators from sovereign jurisdictional reporting.
In July (twenty twenty-one) the Action plan on base erosion and profit shifting launched the ‘Global plan to reform international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate’.
In October 2021 this historic two-pillar agreement was negotiated by 137 jurisdictions including Ukraine.
At present, Ukraine is adjusting tax legislation in the framework of our country's commitment to implement Pillar 1 measures. It is planned to regulate the areas of their application, to streamline the definition of the tax base for income tax on activities related to the digital economy. The conceptual and terminological apparatus on the essence of the process will be standardized, at the same time a list of digital goods and services for calculating the tax base will be established. After the adoption and ratification of the relevant Multilateral Convention, in 2022-2023 the basis for the implementation of a new direction of interstate coordination of financial policy will be implemented.
On slide eight you can see the trends in the ratio of budget revenues and expenditures and GDP of different groups of countries and Ukraine. These dynamics fully reflect the global shocks, destabilization caused by borrowing, currency, tax and budget turbulence.
Slide 8 shows the indicators of redistribution of newly created value through state and local budgets, which to some extent characterizes the size of existing states.
We can conclude that Ukraine is currently undergoing economic genocide. The country will lack its own financial resources needed for its rapid post-war recovery. Ukraine's economic dynamics will critically depend on external financial revenues. We are sincerely grateful to the world community for the united financial support, but we understand that the available resources of international financial institutions are limited. Private foreign investment will be key to a speedy recovery. Receiving them requires a new economic doctrine. We can assume that we should already start getting ready for a corresponding reduction in budget funding, large-scale restructuring of the entire system of public administration.
The state is responsible for collecting taxes and redistributing revenues through budgets at all levels, even for the most adverse external and internal threats to financial stability. Thus, a reliable basis for counteracting the manifestations of disparities in management decisions is compliance with the principles of transparency, accountability in the field of business activity.
The recognized success of the Scandinavian model of government is associated, in particular, with maintaining the confidence of taxpayers in the balance of the size of their services from government agencies with the amount of mandatory budget payments. Crimes in the field of financial, banking, fiscal legislation, as a rule, occur when the institutions of trust in society are weak. In this case shadow transactions and evasion of mandatory payments are considered acceptable. Continuous monitoring of the configurations of financial flows due to contractual obligations will help to take timely measures to prevent damage to public interests in form of budget losses.
A significant reserve to replenish the State Budget of Ukraine is a resource that can be obtained as the shadow sector of the economy shrinks. As you can see in slide 10, in our country such a source has a real basis. President Volodymyr Zelensky set the task as follows: at present, any economic activity is a matter of survival, but we cannot afford the economy to work in the shadow.
In our country, a risk-oriented approach to combating money laundering has already been applied. At the legislative level, the Standards of FATF are successfully implemented.
In Ukraine, the proper and voluntary fulfillment of tax obligations will be ensured by the complete elimination of informal rules of the shadow economy. According to the guidelines of reputable international organizations, risk assessment and management becomes one of the key links in the activities of tax administrations. At the same time, we also consider the political guidelines of society in the context of combating corruption and organized crime.
On the next slide you can see the ways to increase the efficiency, stability and predictability of the preferences of the national tax system in the context of aligning their legislation with the norms of the European Union.
It is planned to implement the updated conceptual principles of tax expenditures with the strengthening of the target nature of tax benefits.
I would like to emphasize that the strengthening of the regulatory function of taxes in order to prevent the legalization (laundering) of proceeds from crime will contribute to the organization of continuous monitoring of benefits and activities of businesses that receive them.
Information on tax expenditures will be used in the process of developing, approving and implementing the country's budget.
It is extremely important to adhere to the principle of stability of tax legislation. This will make it possible over a period of time to build a clear control system and to constantly monitor the benefits that will be part of the tax costs.
Under the current conditions, it is extremely necessary to strengthen the resilience of the components of the fiscal and monetary space to exogenous shocks. On slide twelve, you can see the dynamics of the discount rate of the National Bank of Ukraine, which was raised from 10 to 25 percent in June. At the beginning of the war, the transition from a flexible exchange rate policy to a fixed one was quite justified, as it made it possible to maintain stability in the foreign exchange market. But the fixing of the official exchange rate has led to the risk of the money market falling apart into segments with the possibility of collecting speculative rents.
Unprecedented measures are being taken in our country in the sphere of interaction of independent fiscal and monetary regulators to prevent the economy from falling into a spiral of degradation.
As a candidate for accession to the European Union, we will carry out reforms that will bring our country closer to European standards. I would like to emphasize once again that our society is sincerely grateful to the European and world community for its financial, defense and moral support and unity around the victory over the aggressor.
In conclusion, I would like to say that having received the status of a candidate member of the European Union, after the victorious end of the war, Ukrainian people are waiting for no less difficult tests during the period of post-war reconstruction. The movement to the next stage of development will be carried out through the scientific and technological revolution, during which innovations will be introduced. Society is aware of the need for new and changing existing priorities, including those in the field of anti-crisis fiscal adjustment. Therefore, the synergy of the joint activities of the leading European universities that are present here will accelerate the movement of our countries to common strategic goals of the world economic transformation stated in United Nations: the 2030 agenda for sustainable development. The last, but not the least, I am sure that after the current bloody war in Ukraine, it will make sense to supplement this Agenda with positions on the need to strengthen the resilience of the global and national economies
Медіа-центр
Академії фінансового управління
06 липня 2022 року
